Emerging Business Models: Telemedicine

Alan A. Ayers, MBA, MAcc

Content Advisor and Board of Directors, Urgent Care Association of America

Associate Editor, The Journal of Urgent Care Medicine

Vice President, Concentra Urgent Care

Health care functions most efficiently when the capabilities of the medical provider match the patient’s

presenting symptoms. For example, when patients with low acuity conditions utilize hospital emergency

rooms—which must have facilities, equipment and staff prepared to handle whatever life-threatening conditions

may arrive—individuals, employers and government payers incur additional, unnecessary costs. In fact, studies

have shown that hospital EDs charge up to five to ten times more than urgent care for treating the same

conditions.

Urgent care has experienced phenomenal growth in response to consumer demand for affordable, no

appointment necessary care that’s open nights and weekends. But for low-level conditions, urgent care may not

necessarily be the cheapest or most convenient option available consumers.

As the same entrepreneurial spirit that has driven urgent care pushes forward, it’s spawning new business

models that combine technological innovation, the need to fully utilize a dispersed workforce of medical

providers, and consumer demands for immediate relief—with even greater cost savings.

Telemedicine, in its various forms, can be cheaper and more convenient than urgent care for minor conditions.

In the same amount of time that it would take a patient to drive to an urgent care center and park, that patient

can register on a website, enter insurance and/or credit card information, call a toll-free number, speak with a

doctor, receive a diagnosis and treatment plan, and have a prescription sent to their corner pharmacy. And

certainly while telemedicine may augment location-based urgent care services through improved provider

utilization and a steady stream of referrals, telemedicine’s lower costs and added convenience certainly stand to

take business from urgent care centers.

According to one telemedicine provider, AmeriDoc, if its service had not been available, 39% of its patients

would have gone to an ER, 30% to primary care, and 13% to other options—but 18% chose telemedicine

instead of urgent care. As consumers, employers and payers become aware of these new health care options,

visits that once presented at urgent care centers are bound to migrate elsewhere. As an urgent care owner,

operator or provider, consider the business models in Table 1 and how they either compete with, or augment,

location-based urgent care services.

Table 1: Examples of Telemedicine Providers with Urgent Care Implications

ZoomCare ZoomCare is a Portland-based operator of 21 walk-in medical

centers in the Pacific Northwest that also offers “Take Out” visits to

Oregon residents age 18 and older via Skype. According to its

website, online diagnosis and treatment is available for 27

conditions, from 8am to 12am Monday-Friday and 9am to 6pm on

weekends. Patients register for an appointment online, hold a

reservation using their credit card number, and then are contacted

at the designated time by the ZoomCare provider. Providers consist

of physicians, physician assistants and nurse practitioners. Online

visits cost $89 for self-pay and are also covered by most private

payers in Oregon. Medicare, Medicaid and Tricare are not

accepted. If the web consultation requires a follow-up at a

ZoomCare clinic, self-pay patients are credited back the $89 and pay

only $16 for the in-person visit while insured patients pay their

office co-pay.

AmeriDoc.com/AmeriDocKids.com This division of Dallas-based Innovative Health Insurance Partners

advertises 24/7/365 access to its physician network (which includes

board certified pediatricians) via telephone and email for conditions

that do not require a physician examination. The membership

model starts at $9.95/month for an individual and $12.95/month

for up to five family members. Once a member, email consultations

for medical information and medical advice start at $10 and

diagnostic consults via telephone or web video cost $30. As a

membership model, insurance is not accepted. The company’s

physician screening and credentialing process assures providers are

able to treat patients via the telemedicine platform. Within 24

hours of a provider consult, a medical assistant calls patients to

answer questions and assure satisfaction. Every six months, the

company conducts a quality assurance review of each provider,

which includes patient feedback, to assure the provider is following

AmeriDoc’s practice protocols. AmeriDoc markets directly to

individual consumers (see magazine ad to right) as well as to

employers and brokers, many of whom offer AmeriDoc as a

supplement to reduce utilization of traditional health insurance

plans.

MeMD Dr. John Shufeldt, who founded NextCare Urgent Care in 1993,

launched MeMD in October, 2010. Physicians, physician assistants

and nurse practitioners are recruited from urgent care and primary

care practices to see patients via the MeMD platform. The value

proposition to providers is to capitalize on clinics’ excess capacity

and improve provider utilization. The company’s website asks “Why

wait at an urgent care? Get treated at your home or office now.”

For $49, individuals age 18 and over can arrange a telephone

consultation for 32 conditions with a provider licensed in their state,

who can have an e-prescription sent to the patient’s local

pharmacy. Minors are treated so long as a parent or guardian

initiates the call. Controlled substances and elective medications

are not prescribed. Patients can download their medical records

from MeMD’s secure website to share with their primary care

provider. Currently insurance is not accepted although patients may

themselves submit a claim for out-of-network reimbursement.

KentuckyOne Anywhere Care KentuckyOne, the state’s largest health system with 200 point-of-

care locations, launched a consumer telemedicine service for

Kentucky residents in November, 2013. The service is available 24

hours per day (wait times under 30 minutes) via phone consultation

or secure video chat with a board-certified physician or nurse

practitioner. Visits cost $35, insurance is not accepted, and the

service is unavailable to Medicare and Medicaid beneficiaries.

Providers will prescribe non-controlled substances as needed and if

an in-person visit is required to reach a diagnosis, the consultation

fee will be refunded. Technology is provided by Seattle-based

Carena, who piloted a similar program with Catholic Health

Initiatives’ Franciscan System of Tacoma, Washington. Clinical

staffing is with CareSimple Medical Group, by Washington-based

providers who are licensed in Kentucky. KentuckyOne claims that

the service is intended to “enhance” access channels like urgent

care centers and retail health clinics and to improve access to

primary care in a state which has historically been underserved.

According to its surveys, 44% of Anywhere Care patients have no

primary care provider.

Concentra MyDocDirect Concentra, based in Dallas, operates over 300 freestanding walk-in

urgent care and occupational medicine centers in addition to

another 200+ clinics at employer worksites. After gaining

experience in location-based telemedicine at its employer worksite

locations, in November, 2013, Concentra opened walk-in

telemedicine clinics inside two San Antonio-area Walmart stores.

The centers are staffed by a registered nurse who can provide

health screenings, immunizations, point-of-care lab tests, and

patient education. Diagnostic visits facilitated by the on-site nurse

occur via two-way video technology with a physician located at a

freestanding Concentra medical center. These MyDocDirect

installations are located within the retail storefronts of Concentra’s

parent company, Humana, which provides health and wellness

information and customer support for its insurance plans. In

addition to serving Humana members, the centers will bill major

insurance payers. Self-pay visits start at $65 for a telemedicine

encounter with a physician and $40 for a nurse-only visit.

Competitive Implications for Urgent Care

If the most efficient health care system is one that aligns a patient’s symptoms with a facility and provider’s

capabilities—it stands to reason that there are conditions being treated in urgent care today that could be treated

through lower cost channels. And if consumers are satisfied with the experience and outcomes of these urgent

care alternatives, they’re bound to keep using them and will tell others to do likewise. According to the nation’s

largest telemedicine provider, Teledoc.com, its 4.5 million members are happy with its service; giving a 97%

patient satisfaction rating with 90% of patient issues resolved via telephone and zero malpractice claims.

It’s clear that telemedicine and other emerging delivery channels will put some urgent care visits at risk. The

question for urgent care operators is how to respond. Urgent care operators may:

• Choose to ignore the rise of telemedicine. The risk is that low acuity visits once seen in urgent care will be

lost. To maintain historic volumes, urgent care centers will have to focus on treating higher acuity

conditions;

• Partner with telemedicine providers to receive referrals for location-based services for higher acuity

conditions that cannot be diagnosed or treated via telemedicine; and/or

• Offer telemedicine services from the urgent care center to better utilize providers and/or augment center

revenue.

Conclusion

Telemedicine is an emerging health care delivery channel that potentially offers many patients with low acuity

conditions a cheaper and more convenient alternative to urgent care. As awareness of telemedicine providers

grows, they stand to capture patients who might otherwise be seen in urgent care centers. Urgent care operators

should thus understand this emerging business model and determine the most appropriate response given their

business objectives.